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Christopher Lewis
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Natural gas markets have initially rallied a bit during the trading session on Monday but then turned around to break lower and reach towards the 200 day EMA. The 200 day EMA of course is an indicator that a lot of people will pay close attention to. You can see that over the last couple of weeks we have been simply grinding sideways along the 200 day EMA, as the market is trying to figure out where to go next.

NATGAS Video 30.03.21

At this point, we have filled a gap but have not made a decision as to where we are going next. Quite frankly, I would like to see a bit of a rally from here in order to start shorting again, as the time of year favors lower pricing. Having said that, we did get a little bit overdone to the downside recently, so I think what we are looking at here is a bounce that is just waiting to happen, perhaps more or less from a technical standpoint. However, if we make a fresh, new low, then the market is likely to go looking towards the $2.25 level.

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As temperatures warm in the northern hemisphere, that will continue to work against the value of natural gas as it is still oversupplied. As demand drops in an oversupplied market, one would think that prices have to get lower. The 50 day EMA is currently sitting at the $2.70 level, and therefore I think it is a bit of a barrier worth watching, and that of course the $2.80 level where we have seen a lot of congestion.

For a look at all of today’s economic events, check out our economic calendar.

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